Finance minister Trevor Manuel will probably follow the course indicated in the medium-term budget policy statement when he presents his 2009 budget speech next week, Nedbank economist Nicky Weimar said on Monday.

The budget deficit would probably widen to two percent of gross domestic product (GDP) in 2009/10 as predicted in the medium-term budget policy, Weimar added.

Fanie Joubert of the Efficient group said he was "more optimistic" when it came to the budget deficit.

"We predict a figure of 1.7 percent of GDP for the budget deficit,' he said.

However, he added that there was a lot of pressure on revenue and Value Added Tax revenue was particularly worrying.

"The collection of VAT is being hit by the reduction in consumer expenditure," he said.

Weimar said there would not be "a lot new" in Manuel's budget speech --"for instance infrastructure spending is not new," she said.

"However, this spending will accelerate -- we must be ready to host the World Cup," Weimar added.

Weimar said a case could be made for fiscal policy to be more stimulatory under the present economic circumstances.

"They have the scope to do this as we've had years of constraint.

"However, I think the budget will be hesitant on the tax side and choose to stimulate on the spending side," Weimar said.

She also expected changes to be made for transfer duties for property.

"The housing market is bleeding," Weimar said.

"We could see an increase in the value at which a home may be purchased without transfer duty, which is currently R500,000."

Joubert agreed that there could be changes to transfer duties, "but it's a small percentage of government revenue," he said.

Cutting the tax rate for companies would be a wise move, Weimar said.

"This would prevent further job losses -- but unfortunately I don't think we're going to see a cut like this."

Joubert said cutting the tax rate for companies was on his wish-list.

"Companies are already retrenching -- but a tax cut would prevent more retrenchments," he said.

When it came to social grants, job creation, education and Aids, Weimar said the budget's allocations would grow in line with October's medium-term budget policy statement.

According to Joubert, as this was an election year, social expenditure would most certainly increase.